With thanks to Ed Stradling, here’s a 40 minute interview between Jeremy Thorpe and Richard Crossman, originally broadcast on BBC1 on 24th March 1974.
(This is BBC material so will be removed from YouTube in a week or so. )
You can read our coverage of Jeremy Thorpe’s death here.
* Stephen was Editor (and Co-Editor) of Liberal Democrat Voice from 2007 to 2015, and writes at The Collected Stephen Tall.
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12 Comments
That was tremendously enjoyable. It was refreshing to listen to an interview in which interviewer and interviewee were both so direct, specific and to the point and simultaneously entirely courteous to each other.
There are very few interviews I see these days that are like that.
Lots of discussion about coalition government – the February result being a “hung parliament”.
“I don’t think 6 million people* voted to keep Ted Heath in office”, says Thorpe. That, but mainly that the arithmetic didn’t add up, was why there was no Conservative-Liberal coalition after the February 1974 General Election, leading to Harold Wilson’s Government and the second General Election in October 1974.
* 6 million voted Liberal, but as we were not targeting so ruthlessly back the, they only returned 14 Liberal MPs. We hoped to advance further in the October election, but in the event our vote fell. and Labour were returned with a tiny overall majority.
Fascinating and civilised. It reminded me what a formidable advocate Jeremy was and it is encouraging to be aware that so many of his predictions about constitutional change have come about.
I agree with Anthony and leekliberal that the civilised and courteous nature of this exchange makes a refreshing contrast to today’s pugilistic but ultimately sterile jousts. This is partly down to the format of this BBC programme: in other contexts – on the floor of the House of Commons, for example, in party conference speeches and on the election stump – the leading politicians of that era were perfectly capable of stooping to petty point-scoring, none more so than Harold Wilson (who was much better at it than Ted Heath). But, away from those more gladiatorial and patisan arenas, a good number of them seem to have had the self-respect and intellectual curiosity to engage in a civilised debate of this nature, aiming to shed light rather than merely generate heat.
The other thing that struck me was how many of the issues they discussed have echoes in today’s politics, and in many cases remain thorny, unresolved problems. Leekliberal points out that Thorpe was ahead of his time in highlighting the way devolution was likely to evolve and have implications for the rest of the UK and the constitution.
On the other hand it seems to me that Crossman was more prophetic on the destiny of the European project, a single currency and the implications for sovereignty and democracy. He also made the perceptive point (still missed by many EU enthusiasts and critics alike) that the measure of EU bureaucracy is not primarily the number of civil servants employed by the Commission, but the volume of directives it issues.
Also interesting was the discussion about what Thorpe refers to as the ‘credit income tax system’ which the Heath government had introduced (some imaginative tax and benefit reform being one of the few redeeming features of its otherwise shocking economic record), and what Crossman calls ‘negative income tax’ (an idea proposed by Milton Friedman). The reforms started by the Heath government were not really taken forward by its successors; although means-testing and selectivity did gradually take over from universalism, what emerged was a labyrinthine maze of different benefits all with different tapers and withdrawal rates – a long way from the original negative income tax idea. The aim of Universal Credit is to tackle these failings and is essentially the modern incarnation of what Thorpe and Crossman were talking about.
It’s also worth noting that Crossman, Labour’s foremost expert on pensions, argues against relying on higher taxes on the wealthy to fund more generous social benefits and pensions. He favoured the contributory principle whereby the average worker would be expected to pay higher taxes ‘to get them used to the idea of paying for the old’, though he notes with dismay that this idea wasn’t all that popular with actual workers or trade unionists. What he envisaged was a large earnings-related component to the state pension that would be more directly linked to contributions.
In this area, with the flat-rate state pension the coalition is set to introduce, we have moved in the opposite direction. But the broader debate about universalism and the contributory principle versus selectivity and means-testing remains very much a live issue.
By contrast, some of the other ideas they discuss – like the prices-and-incomes policy they both regard as essential to manage the economy – have thankfully been consigned to the dustbin of history. Thorpe’s faith
Alex Sabine, you might want to reconsider your point in the context of what is happening to incomes with the olicy of the current Conservative dominated government.
You said —
“….By contrast, some of the other ideas they discuss – like the prices-and-incomes policy they both regard as essential to manage the economy – have thankfully been consigned to the dustbin of history. ”
But it is unquestionably a key policy of the present government to drive down incomes.
The recent Rowntree study revealed that the least well off 25% of our population have had their incomes reduced by this government.
Policies to cut benefits, remove benefits, sanction people on benefits, replace public sector jobs with private sector zero hours contract jobs with insufficient hours per week to maintain existing income, etc etc
It is a different sort of incomes policy from the type discussed by Crossman and Thorpe.
Thorpe and Crossman favoured an incomes policy that was fair across the board and applied to all incomes.
Today’s government has an incomes policy which reduces the incomes of the poor (including the working poor) whilst turning a blind eye to the obscene bonuses of casino bankers.
(Looks like the wrong post got deleted so I’m adding the missing bit, or what I remember of it)
…Thorpe’s faith in using reflationary budgets to pump up demand and keep unemployment low (this at a time when inflation was heading towards 20%), and then trying to contain the inflationary consequences through statutory wage and price controls, had been tested to destruction by the Heath government. But the British establishment was too wedded to vulgar Keynesianism to notice. It took a less intellectual politician (but perhaps one with more common sense than either of these two) to spell out the reality to the Labour Party conference in 1976.
(Apologies also for the mis-spelling of your name, Antony)
JohnTilley – I think it’s pretty silly to say any government seeks as a matter of policy to drive down incomes.
Funnily enough, if anything this was truer in the 1970s, when formal incomes policies operated, than it is today. The whole point was to hold the increase in money wages below the prevailing inflation rate (thus reducing real wages) and try to put the wage-price spiral into reverse. A drop in real wages and thus living standards was an actual objective, though it wasn’t advertised so explicitly to the voters of course – the hope being that once inflation had been tamed living standards could then rise again in line with productivity growth.
This was based on false reasoning in my view, since inflation is a disease of money and it is monetary policy that is of central importance. Trying to combat inflation through wage and price controls is like looking down the wrong end of the telescope. But in theory an incomes policy that worked could limit the unemployment fall-out of tackling inflation: by cutting real wages, it could prevent a monetary squeeze resulting in higher unemployment. It was this outcome that the Callaghan government was seeking in the late 1970s. The problem was that no incomes policy could be sustained for very long, and when the brakes came off there was a fresh wage-price spiral.
Seeking savings in the welfare budget as part of public expenditure control is not incomes policy. Likewise, increasing the income tax personal allowance by more than £4,000 since 2010 is not incomes policy, even though it clearly has an impact on the incomes of millions of workers, including those working on low pay. Raising the minimum wage is also not incomes policy in the sense that it was widely understood in the 1960s and 1970s, since it is acting only as a ‘floor’ not a ceiling or across-the-board norm, and it is not being done for the purpose of macroeconomic management as incomes policy was.
What Thorpe was advocating was statutory control of prices, wages and presumably dividends in order to curb inflation. This had been tested to destruction by the Heath government, and had fuelled rather than contained inflation. Inflation does not make most people richer, although it does redistribute income in an arbitrary way towards those with large debts and away from savers and those on fixed incomes. Moreover, the price to be paid for higher inflation was ultimately, as Callaghan said in 1976, “higher unemployment as the next step”.
Unfortunately the Liberals continued to pursue the chimera of lower inflation through incomes policy. As I posted in another thread, Thorpe’s predecessor as leader, Jo Grimond chastised the party for this in 1981, saying: “We should not delude ourselves into thinking that an incomes policy is other than a serious infringement of freedom… Nor have the Liberals explained how it is to be worked, and even if they had, it is certainly not a permanent answer to our economic troubles.”
Going back to the situation today, with inflaton below target at around 1.5% and weak earnings growth holding back the growth of tax receipts and causing it to miss deficit targets, the government is keen to see higher wages and incomes, not lower ones. Unlike the situation that confronted previous British governments, it would have no use for an incomes policy that sought to cap wage settlements even if it thought one was feasible.
Alex Sabine
I will respond to just two of your points.
1– the selective quote from Jo Grimond does not adequately represent his views on incomes which are not at all one-dimensional as you suggest. For some years he advocated a national maximum wage (as opposed to a minimum wage) because he thought those at the top of the incomes league were more than adequately rewarded and on top of their pay had all sorts of perks. He was throughout his political life a strong supporter of workers cooperatives , industrial democracy and profit sharing. He devoted a chunk of one of his books to the Mondragon experience in the Basque country.
2– your belief that the present government “wants to see higher wages and incomes” seems nonsense. Are you suggesting that they have cut benefits by accident? Do you really believe that the various policies of this government which have resulted in lower wages and incomes are some sort of Act of God? Surely you do not think they are so ineffective that the incomes of 25% of the population have declined despite their best efforts?
JohnTilley: Jo Grimond had a thirst for ideas and on some subjects he advocated quite different things at different times. I accept some of your representation of his views, notably on industrial democracy and worker participation. I’m not aware that he called for a statutory maximum wage, as distinct from bands within wages could be set freely by the market. The comparison here is with the statutory fixing of all wages which both the Tories and Labour resorted to in the 1960s and early 1970s. As ever, context is important.
My main point is that, having lived through those experiments and seen the myriad failings of the British economy and of UK economic policy, by the 1970s Grimond’s views had evolved considerably. Unlike Thorpe, Steel, the Labour right, the Tory left, those who would go on to form the SDP and the economic establishment, Grimond learned from experience. His views on incomes policy, on the size and role of the state, on the public corporations and other things moved towards a more clasically liberal position, while of course retaining the desire to spread capital ownership and economic opportunity more widely.
The quote on incomes policy is not selective, it represents his settled view on the subject by that time. And scepticism towards the central state, its bureaucracy and its spending was a consistent theme of his from the 1950s right through the rest of his political life. His complaint that Liberal policy often entailed “advocacy of large expenditure on every sort of thing from social services to Highland Development while at the same time saying that we were living beyond our means”, and that “a great deal of Government expenditure today is not helping the poor or anyone – it is positively harmful” were not aberrations but the authentic Grimond.
And in case you think it was all a question of a shift to the Right in his later years, as early as 1957 (under a Conservative government, and when public spending was at almost its lowest share of GDP of the whole postwar period), he had argued: “Neither the Government nor the local authorities make any wealth or have any money of their own. If we want them to spend more and more we have to pay. The remedy is in our hands. Stop running to them asking them to do this, that and everything under the sun – and demand instead that they stop doing and spending so much.” Which other Liberal leader since has expressed such an instinctive preference for smaller government?
On your second point, of course I don’t think the decline in living standards since 2010 – it actually began earlier than that, but obviously that doesn’t fit the narrative of blaming everything on the coalition – is an act of God. It is the legacy of the worst financial crisis and recession since the 1930s.
Economic events have long lags and ‘lead times’. We are still living, and will continue to live, with the consequences of that crisis in terms of a permanently lower national product and therefore lower household incomes. Likewise the huge budget deficit is a legacy problem of borrowing during the ‘boom’ years – the IMF reckons the British government was running a structural deficit of 5.2% of GDP in 2007 – as well as the major fallout from the banking crisis and recession themselves.
Failing to confront these realities would not magically have prevented the fall in living standards. It makes no sense to assert that the government has deliberately engineered it, either in political or economic terms.
What I am saying is that, unlike at most points in our recent history, the government would welcome somewhat higher wage settlements in the private sector at this juncture because of low inflation and the need to boost living standards and tax receipts. It cannot grant such increases in respect of its own employees because that would undo its attempts to curb the deficit, and it is sensibly choosing to limit pay rises rather than rely wholly on job losses to reduce its paybill.
A fascinating programme.
Thorpe comes across very much as a political and intellectual lightweight in comparison to Crossman. Deferential even. But the latter looks very ill and tired indeed. It is not clear when this was actually filmed, but it was broadcast a few days before Crossman died from liver cancer. The coughs and general desuetude are really very pitiable and sad. 🙁
I pretty much agree with Alex Sabine’s assessment politically. Both are captive to the dead end of the “prices and incomes policy” that it took Thatcher to smash. The comments on Trade Unionism are now quaint. (Also thanks to Thatcher) .
But Crossman is the really prescient one. He opines that Powell and Foot (he doesn’t include Benn) are right that in the EU, Parliament will lose its sovereignty.
This is the red t hot burning political of today, fifty years later.
I suppose it is FORTY years later. But you know what? I reckon it will still be a running sore ten years from now and longer…